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Customer Service Trumps Price

  |  June 1, 2005   |  Comments

Customer satisfaction is a better success indicator than price for online retailers.

A new study from ForeSee Results, "The ForeSee Results Forty," looks at Internet Retailer's top 40 online retailers by sales and reorders the list according to customer satisfaction.

Survey questions examined satisfaction with the online browsing experience, Web site elements, price and site experience among 11,000 respondents.

"For retailers who improve their site experience, there will be a pretty significant payback in terms of the behavior and loyalty of their customers," said Larry Freed, president and CEO of ForeSee Results.

Pure play e-tailers scored higher overall, with a few cross-channel players managing to rank in the ratings. Netflix ranked 17 on the Internet Retailer report, but rated highest in ForeSee's study with a score of 85 out of a possible one hundred. Cross-channel QVC is 28 in Internet Retailer's report, but third in satisfaction with a score of 84. Cataloger L.L. Bean redeemed its number 38 ranking in revenues with the fifth spot (82 in satisfaction); brick-and-mortar retailer Old Navy holds the 21 spot on the revenue list, ranking sixth with a score of 81 in satisfaction.

Retail Web Site Satisfaction Scores by Channel
Average Satisfaction for Category Highest in Category Lowest in Category
Internet pure play 79 Netflix.com Buy.com
Manufacturer direct 77 Apple.com
Avon.com
Gateway.com
Multichannel 76 QVC.com Kmart.com
Brick-and-mortar 76 OldNavy.com Kmart.com
Non brick-and-mortar dominate 77 QVC.com Gateway.com
Source: FGI Research, 2005

Scores broken down by category illustrate online sites like Netflix and Amazon.com, as well as catalogers L.L. Bean and Harry and David top the list. Brick-and-mortar stores consistently fall lower in satisfaction ratings.

Retail Web Site Satisfaction Scores by Category
Average Satisfaction for Category Highest in Category Lowest in Category
Books/CDs/Videos/DVDs/
Toys/Hobbies
81 Netflix.com ToysRUs.com
Drug/Health & Beauty 78 Avon.com Quixtar.com
Apparel & Accessories 78 LLBean.com BananaRepublic.com
Flowers/Gifts/Jewelry/Food 76 HarryandDavid.com FTD.com
Computers/Electronics 76 Newegg.com CompUSA.com
Mass Merchants/Office Supplies 76 Amazon.com Kmart.com
Source: FGI Research, 2005

The study emphasizes the importance of enhancing the overall site experience, not just spending to drive consumers to a Web site with promotions and price.

"If you satisfy your customers," says Freed, "they are going to be long-term and loyal, and that is going to be good for your customer well-being."

Top 40 E-Retail Web Site Satisfation Scores April 2005
Click to view full-size chart
The study used the University of Michigan's American Customer Satisfaction Index (ACSI) methodology, combined with FGI Research's SmartPanel resource to survey 11,000 respondents between March and April of this year.

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ABOUT THE AUTHOR

Enid Burns

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